Guest Post By Paul Keating On UDRP’s: “Why Panel Certification is Important” The Case Of HardwareResources.Org

This Guest Post was written by Paul Raynor Keating, Esq.[1] one of the preeminent attorney’s practicing in the domain industry. Paul has handled many UDRP’s and had some thoughts about a recent UDRP involving the domain name HardwareResources.org.

We are publishing the post unedited:

“”Although the UDRP has functioned for over a decade, the evidence continues to mount in favor of a certification process so all can be assured that panelists have the proper legal knowledge and address claims seriously. Examples abound of panel errors but I have seen few that competes with the likes of Hardware Resources, Inc. v. Yaseen Rehman, Claim Number: FA1201001423229 (HardwareResources.org), a recent decision by NAF-favored panelist Atkinson (http://www.dnattorney.com/study.shtml).

In Hardware Resources, the panelist was so absorbed with the Complainant’s assertions that he failed to examine even the most basic aspects of the claim. Granted the case was a default. But that provides little excuse given the obviousness of the problems. Given Mr. Atkinson’s litigation experience (he authored an article entitled “How to Respond to Trial Objections in 1995), I am somewhat perplexed.

Complainant asserted 4 registered trademarks for “HR Hardware Resources”. A 10-second trip to the USPTO site satisfied my surprise that the PTO would allow registration of such a descriptive trademark. Complainant’s “trademarks” consisted of 2 text marks and 2 design marks. Each of the marks contained the following disclaimer:

“NO CLAIM IS MADE TO THE EXCLUSIVE RIGHT TO USE “HARDWARE RESOURCES” APART FROM THE MARK AS SHOWN.”

The significance of the disclaimer is of course that the Complainant had expressly disclaimed the words “Hardware Resources” if they did not appear with “HR”. Perhaps Mr. Atkinson (or more likely the intern at NAF who may have written the decision?) missed that bit.

“The differences between the mark and the disputed domain name include the deletion of the initial letters “H” and “R” of Complainant’s mark, the removal of the space between the terms, and the addition of the generic top-level domain (“gTLD”) “.org.” The Panel holds that removing letters from a mark does not differentiate a disputed domain name from the mark.”

Had Mr. Atkinson (or his associate) taken 20 seconds of time he could easily have discovered that the elimination the “HR” was in fact material for the simple reason that Complainant held no trademark rights in their absence. Actually, come to think if it, the disclaimer would have been printed in the trademark registration certificate that Complainant surely produced.

From this highpoint, the analysis gets only worse. Legitimate interest is found lacking because “using a confusingly similar disputed domain name to host pay-per-click links and pop-up advertisements, whether competing or not, does not constitute a bona fide offering of goods or services or a legitimate noncommercial or fair use according to Policy ¶¶ 4(c)(i) and 4(c)(iii).” Of course no mention is made of the descriptive nature of the asserted trademark or of the domain.

The authority for the panelist’s position? Two NAF decisions, Hewlett-Packard Co. v. Collazo, FA 144628 (Nat. Arb. Forum Mar. 5, 2003) and ALPITOUR S.p.A. v. Albloushi, FA 888651 (Nat. Arb. Forum Feb. 26, 2007). The panelist was obviously not familiar with either of the decisions. Hewlett-Packard addressed the domain HPCanada.com. HP is obviously a famous, non-descriptive mark and there could be no legitimate interest in using the domain to display links for computer equipment. Alpitour dealt with the domain BravoClub.com. The asserted mark was used for a hotel chain and obviously not descriptive; respondent used the domain for PPC for (surprise….) hotels. Exactly how HardwareResources.org presents a factual or legal scenario that is even close to Hewlet-Packard or Aplitour is a mystery.

Going from bad to worse, Mr. Atkinson next finds bad faith because Respondent offered to sell the domain to the Complainant for a whopping $40.00. Surely this is a joke. The opinion is apparently based on an empty allegation by complainant. God forbid there be any reference to evidence. I am always amazed how far panelists will go to “justify” an expansion beyond the actual text of the UDRP when doing so in favor of complainants. I rarely see this when the issue might favor the respondent. This $40-issue is yet another example. While it is possible that $40.00 was more than the out-of-pocket costs, the rule in this regard is tied to the concept of targeting and registering domain names for the purpose of holding them ransom to a known trademark holder. This case fails the mark by any stretch and by even mentioning the issue Mr. Atkinson opens both himself and the UDRP process to ridicule.

Yet again showing his preference for complainants, Mr. Atkinson finds bad faith registration based upon PPC use with websites that “have featured pay-per-click links, some relating to Complainant’s competitors and some being simply generic” and some that ‘displayed information about Complainant”. Mr. Atkinson thus finds that the respondent must have registered the domain “to attract consumers and create confusion for its own profit”. This is lumped together with the $40-issue to support a finding of bad faith.

It is telling that the only reference to “generic” was in the Complainant’s allegations. The panelist certainly does not mention the word or deal at all with the descriptive nature of the phrase at issue. The use of a descriptive domain for descriptive purposes has repeatedly been found both legitimate and in good faith. It has long been held that the foundational issue is whether the respondent “targeted” the complainant. Here, the Complainant had no trademark in “Hardware Resources”. The domain was used for – guess what – PPC links related to items long considered to be hardware-related. That Complainant may have appeared in any of the PPC links is the fault of the Complainant who voluntarily selected a less-than-stellar trademark.

The most important lesson to be learned here, however, is not that Mr. Atkinson should abstain from being involved in the UDRP process. The important lesson is that decisions such as these destroy the carefully structured balance of the UDRP process as a whole. Respondents are repeatedly told that they can legitimately register and use domain names for descriptive purposes. It instills little confidence in the “system” when panelists such as Mr. Atkinson issue ill-thought out opinions such as this one.

While panelists aren’t earning the salaries of bankers in New York, this case shows that 20 seconds of thought would have produced the correct result. Trademark disclaimers are there for a reason; without the disclaimer the USPTO would not have issued the registration. It defies logic to permit a registration with a disclaimer and then support a trademark in only what has been disclaimed. Complainants must be held responsible for selecting descriptive trademarks. After all, they do it for a reason – a descriptive mark gives them a leg-up on the competition. If a consumer is looking for “hardware”, coming across a sign for “hardware resources” leads to the assumption that one will indeed find hardware items there. However, having selected such descriptive marks they should not be permitted to use them as a sword to prevent others from doing so.

And, $40 for a domain name? I am not sure who was being sillier; the panelist in using this as bad faith or the respondent who thought it was a good idea to make the offer.””

[1] Paul is an attorney specializing in the domain space. He has offices in Barcelona and London.

About Michael Berkens

Michael Berkens, Esq. is the founder and Editor-in-Chief of TheDomains.com. Michael is also the co-founder of Worldwide Media Inc. which owns around 80K domain names and whose retail site is at MostWantedDomains.com. Michael is also a Director of RightoftheDot.com which is a consultant in the new gTLD space and a broker of super premium domains. Michael Is also one of the 5 Judges selected for the the Verisign 30th Anniversary .Com contest at #Internetofficial

Comments

I agree with Paul, this is one of the stupidest decision I have seen come out of UDRP.

Some additional points –

#1. The domain (.org) was not registered until this person reg’d it in Nov.
#2. The registrant lives in Pakistan. He is suppose to know about this ‘questionable’ TM.
#3. The complainant could have bought it for $ 40??
#4. The respondent also reg’d the .info at the same time. Why didn’t they include that one?
#5. (sorry Paul) Did the lawyer only pursue this complaint for the legal fees?
#6. Maybe, they should start giving UDRP panelist a ‘senility test’ every couple years??

While there are some great panelists, it’s cases like these (and one can find many others) that demonstrate that the playing field is tilted towards complainants.

If there were an equal number of poor decisions where the *respondent* won, based of flawed reasoning, the TM lobby would go berzerk. Instead, they remain silent. A day will come when a respondent sues a UDRP provider and/or the panelists involved — the “discovery” portion of that case will be fun to watch, as we get a glimpse behind the curtain.

The GNSO’s caving in to TM interests (abetted by the co-opted GAC and gun-shy ICANN staff) at their December 2011 meeting, and voting to defer even the inititaion of procedural UDRP reform review until mid-2014 at the earliest, is IMHO indefensible.

Message to registrants — keep paying those renewal fees that support the ever-expanding ICANN infrastructure, but don’t expect any serious attention to your due process rights any time soon.

As for this decision, the examiner is supposed to be even-handed even when the registrant fails to respond — and in this instance the verdict is a clear FAIL. Hardware Resources is a generic term if ever there was one — and, if anything, the offer by the Pakistani-domiciled registrant to sell the DN to the complainant for $40 should be evidence of good faith (and the complainant’s decision to turn it down, if true, and bring a UDRP instead is evidence of imbecility).

Final question: Where’s the quality control at NAF? Is there any review of examiner decisions before they are final?

after doing a little background research on naf and its history and purpose, one should not be surprised by decisions like this coming from that organisation.

if you are a tm registrant, perhaps with a descriptive mark, decisions like this make naf look like the good choice of forum. maybe this is naf’s style of business development. since the domain going to be transferred to the complainant, whether for $40 or the cost of a UDRP filing, the only point was to publish and let tm registrants know “naf is working for you. here’s how.”

Here’s a thought — While Public Interest Registry (PIR/.org) is obliged under the Rgeistrar Accreditation Agreement (RAA) to transfer domains pursuant to a UDRP decision, this particular one is so clearly erroneous that it would be a benefit to all of its registrants if it refused to take immediate action and instead asked ICANN to inquire into this case and, if it believes that the UDRP has been abused, to require NAF to void the prior decision and instituite a new proceeding in which the relevant precedents and the UDRP policy are rigorously adhered to.

THERE’S A GOOD CHANCE THAT .ORG HAS NOT YET TRANSFERRED THE DOMAIN — UDRP POLICY REQUIRES THAT A REGISTRAR IMPLEMENT A DECISION WITHIN 10 DAYS AFTER RECEIVING OFFICIAL NOTICE FROM THE DISPUTE RESOLUTION PROVIDER, AND THIS NAF DECISION WAS ONLY ISSUED ON FEBRUARY 14TH.

As noted by WIPO, failure to respond to a UDRP does not result in automatic default judgment:

4.6 Does failure of a respondent to respond to the complaint (respondent default) automatically result in the complainant being granted the requested remedy?

Consensus view: A respondent’s default does not automatically result in a decision in favor of the complainant. Subject to the principles described in paragraph 2.1 above with regard to the second UDRP element, the complainant must establish each of the three elements required by paragraph 4(a) of the UDRP. Although a panel may draw appropriate inferences from a respondent’s default (e.g., to regard factual allegations which are not inherently implausible as being true), paragraph 4 of the UDRP requires the complainant to support its assertions with actual evidence in order to succeed in a UDRP proceeding. There are many examples of cases (typically involving complaints based on wholly unsupported assertions or mere conclusory statements) to which there has been no response where (not withstanding such respondent default) the decision has nonetheless gone in favor of the respondent on grounds that the complainant has failed to prove its case.

Also, according to WIPO, “if after considering the submissions of the parties, the Panel finds that the Complaint was brought in bad faith, the Panel is REQUIRED to declare in its decision that the Complaint was brought in bad faith and constitutes an abuse of the administrative proceeding.”

THIS DIDPUTE WAS SO CLEARLY BROUGHT IN BAD FAITH , AND THE DECISION IS SO CLEARLY ERRONEOUS AND SUCH A BLATANT INSTANCE OF REVERSE DOMAIN NAME HIJACKING, THAT COMPLIANCE WITH IT WOULD BE TO AID AND ABET OFFICIALLY SANCTIONED THEFT OF A VALUABLE DOMAIN.

.Org has an impeccable reputation on TM abuse, having led the way to eliminate abusive domain tasting. As the non-profit “domain of trust” it should refuse to be party to such a blatant abuse of the UDRP and its registrants’ rights.

IF .ORG REGISTRANTS AGREE THEY SHOULD CONTACT IT IMMEDIATELY AND ASK FOR IT TO LOCK THE DOMAIN PENDING FURTHER PROCEEDINGS AND REQUEST THAT ICANN LAUNCH AN INVESTIGATION INTO THIS HARDWARE RESOURCES DECISION.

eNom has at least 4 more days to transfer before they hit the deadline, and maybe more depending on when NAF officially notified them. If they send a request to ICANN immediately requesting an investigation and a freeze they can put the onus on ICANN to do something about this clear abuse of the UDRP process.

You’re too pessimistic. Viral protest got Go Daddy to reverse its support for PIPA/SOPA. Viral protest got Congress to take those bills off the fast track. And viral protest by thousands of registrants can send a strong message to NAF, PIR, eNom, and ICANN that this kind of decision is just not acceptable, that they want a UDRP with some real integrity so that both TM owners and registrants can expect a just result.

Just being realistic, Phil. I wouldn’t expect Demand Media (owners of eNom) to want to raise a fuss, when they’re seeking to be in ICANN’s good graces for new TLD applications.

The only reason they *might* want to raise a fuss is because they’ve lost more than 3 UDRPs in the past few years (and thus might have *all* their new TLD applications denied for that reason).

Expecting them to stick their neck out for a low quality domain name, on which their profit margin might be $3? Not the best “test case” in my opinion.

Here’s a better “test case” — have Paul Keating and other lawyers who routinely represent respondents apply en masse to be panelists, to see how WIPO/NAF react. If they’re denied, that directly demonstrates the bias, because there are a number of panelists who routinely represent complainants on the list of panel members.

And, if they accept applications but don’t send them any cases, that’d be even more evidence to use against NAF/WIPO.

“Your mission, should you choose to accept it, is to infiltrate WIPO and NAF and gather direct evidence of corruption….”

Thanks everyone for the comments and I am glad my short note started a good discussion.

Phil, while your idea of enom taking the matter up with ICANN would be wonderful (and I hope they do), I know that they do not want to be in the business of judging UDRP decisions for quality.

Quality control is supposed to be at the panelist and ADR provider levels. IMO (and I would like to hear from the panelist), this decision has the markings of having been ghost written by someone who did not get it and it unfortunately passed muster and was signed by the panelist.

My preferred solution for this type of situation is to form a group to actually purchase the domain name from the respondent. The buyer then, standing in the respondent’s shoes, files legal action seeking declaratory relief under the ACPA AND invalidating the mark.

This was a silly trademark that (IMO) the USPTO examining attorney should never have allowed out of the gate.

Wow. I routinely represent trademark owners and I have to agree — that is a really bad decision. I do have one question. If the registrant offered to assign the domain name registration for $40.00, why would anyone spend $1300 for the filing fee, plus several thousand more for attorneys’ fee, to file a UDRP complaint?